Measure for Measure

“A laser-like focus on measuring impact”, is Ed Penhoet’s description of the philosophy of the Gordon and Betty Moore Foundation, which he ran from 2004 to 2007. In a keynote conversation with Matthew on June 25th, he rejected criticism that the foundation, established in 2000 by one of the founder’s of Intel, was too obsessed with measurement. This criticism has implicitly been accepted by his successor, Steve McCormick, however, who has relaxed some measurement requirements in order to take what Penhoet calls, with a smile, a slightly “fuzzier” approach.

In general, too much philanthropy is unfocused and doing things in which it is impossible to know what difference, if any, the giving is making, says Penhoet.

Penhoet also questioned the usefulness of the Center for Effective Philanthropy, an organisation we praise in the book as a leading philanthrocapitalism intermediary. The CEP’s best-known product, the grantee perception report, “doesn’t measure effective philanthropy”, he said, “it measures a foundation’s popularity with those it gives grants”. When the Gordon and Betty Moore Foundation went through the CEP process, it got a decidedly mixed report. But that is because “many of our grantees didn’t like us, because we asked them tough questions about the impact they were having and whether they were using our money to achieve our goals”.

Penhoet is the sort of foundation chief we like – a successful business man, the co-founder of biotech pioneer Chiron, who brings his business brain to philanthropy, being strategic, no-nonsense, having a realistic sense of what the foundation can achieve, and above all wanting to use giving to make a demonstrable difference.

As a fairly large foundation, with assets of $6 billion, the Gordon and Betty Moore Foundation has more ability than most to drive change. Even so, Penhoet and Gordon Moore, the philanthropist who stumped up the money, have focused on areas where they believed they could bring about meaningfully better outcomes. One area where Penhoet believes a difference was made was revitalising the relatively neglected academic field of marine micro-biology, another was improving ocean stocks of North Pacific salmon, another was raising the quality of nursing in the Bay Area (which Penhoet says had been among the worst in the country).

Yet there have also been failures, such as an attempt to reduce deforestation in the Amazon. The foundation knew the project was risky, but had not reckoned with the recent surge in demand for corn for ethanol production, which caused trees to be cut down for land to grow replacement soy for that lost due to greater corn production.

It will be interesting to see how the less laserlike, less measurement-obsessed Gordon and Betty Moore Foundation performs under its new leadership. We suspect its grantees may like it more, but we are not so sure its impact will be greater.